Mustache on the Move: The Evil Mister Money

Aha! I see there is an imitator trying to cash in on Mr. Money Mustache’s fame.

When biking home from the library today, I passed through the border where the nice Big Trees and Historic Buildings and Cafes part of town degrades to the regular free-for-all capitalism-and-urban-sprawl section which characterizes most of the country.

And there it was, springing up in a building that had sat abandoned for a year or two. Something called Mister Money. Or, Mister M$ney, I suppose, depending on how you are supposed to read that O.

Mister Money is yet another one of those predatory “Financial Services for Financially Self Destructive People” chains, where you go in and ask for a $100 advance on your next paycheck, and they provide it for a $15 fee. If you work it out with compounding, that’s only a 3,685% annual interest rate for such a loan!

Of course, all MMM readers will be amazed at the concept of anyone with a job not even being able to make it through two weeks to their next paycheck. Because really, didn’t you know how much you were earning BEFORE you went out and bought too much shit? But the concept of entire national chains of stores to service this need, dozens of these chains, each putting up dozens of locations in every crappy little town in the country. THAT is the kind of amazement that just leaves me with a blank, drooling face.

But I have more for you. Check out these choice words from their website:
“Payday loans are a quick easy way to get that emergency cash. Americans do a pretty good job of managing their money, although most of us need occasional help for those unexpected times.”

Uh-huh. They sure are “expecting” a lot of “unexpected times” with that many locations nationwide. I wonder if the writer was able to keep a straight face while typing out that little gem.

On the bright side, the commercial property adjacent to this one is still vacant. I’m thinking of opening up my first Mr. Money Mustache franchise right there, and having my sign list the same services. Except when you come in and actually ask for a loan, I PUNCH YOU IN THE FACE AND TELL YOU TO WISE THE FUCK UP AND GO SELL SOME OF YOUR SHIT INSTEAD OF BORROWING MORE MONEY!

That would take care of the educational aspect of my business. I would also do community improvement, which would consist of welding shut the doors of Mister Money, to further protect people from accidentally screwing themselves over with predatory loans.

As my business grows, I can expand into the areas of Auto Finance and Credit Cards as well. Would you come work for me?

—

Amusing Update: After I wrote this article, it was apparently translated into British and appeared on a blog called “Simple Living in Suffolk”. I found out when the author linked to this article from his own! You can read the results here.

I am more optimistic about this idea as a viable business, if only because I think the friends/family of some people would pay :)
Registering and maintaining charity status is not cheap, though it does give you more flexibility for fundraising. I can see the Kickstarter page now…

I once went with a guy to one of these establishments. His ‘unexpected’ addiction to cigarettes was the reason for the exchange. But I must say, the transaction seemed kind of official and secretive, like he was doing something important while I stood there, seemingly unable to comprehend.

If I was smart I would have given him $100 and said, look, pay me $115 tomorrow and we’ll call it even. He would have been so grateful, maybe even referred all is equally cash rich friends my way.

I guess shock and despair when observing this great money exhange institution prevented me from seizing the moment.

Man, I got a great laugh out of that. There are a lot of vacant stores in my town, and I need to get myself a set of boxing gloves and set up the same store. I thought I was an arrogant SOB when I said high gas prices are great because they get all those other suckers off the roads but this one takes the cream, bravo!

I just love your approach! I used to work in one of these type stores in 2003, it really opened my eyes to a lot…you would not believe how many of these uneducated patrons will renew their loan for years!!!! That’s 15 bucks every two weeks for borrowing the same 100 bucks, and even worse is that many of these loans were for $250 and i think the fee was something like $50.

I am not without fault, prior to working at this place, I’d had a one-time loan because I desperately needed the cash for a quickie move out of the city. It really was an emergency.

My advice to anyone who has an ongoing addiction to this loan, ie you’ve been renewing the same loan for months, is to drop the loan amounts over time (if you cant afford to pay the full). Each time you pay your fee, take a smaller loan, until you can pay back the smallest loan they offer. It hurts less this way, but still smarter to pay in full obviously.

Your uneducated and disrespectful. Pawn shops are there to lend people money when they need it quickly. Not all those customers are drug addicts, or people who spent too much money on material possesions they didnt need. Lots of them are average, middle class working folks who really did have something come up that they couldnt afford to pay for until their next payday. What if they have no other way to get the money? Lots of people think pawn shops are great. Maybe you should take up a different hobby, your obviously not very good with this “young” blog.

Niiiiiice. I was up late last night having fun considering so many possible responses to this comment. But in the end nothing could make fun of the comment more than the comment itself. It is perfect. Thank you for this masterpiece.

I’m disappointed to see this post, esp. this flippant response to your upset reader. Your post is dated from 2011, so I’m hoping back then you didn’t realize how devastating the Great Recession has been for the lower-middle class and the poor!

People in retail and service industries really do not make enough to get by. We don’t need to get into those who work minimum wage. Of course, lots of them probably can use financial education too, but it wouldn’t even be on their priority list if they can’t put food on the table. We are lucky to have cushy corporate jobs (which you’re blessedly freed from), but not everyone is luck.

I challenge you to go spend an hour or two at that sad, depressing loan shark store and observe their customers. I hope you’d come away feeling a bit different then. Sorry to be a no-fun scold, but I like your blog so much even though I only just discovered it, I hope the author doesn’t turn out to be some self-righteous smug without empathy for the less fortunate.

I think you are vastly missing the entire point of this blog to say that people in retail and service don’t make enough to “get by”. IF you can’t put food on the table then financial education should be of the HIGHEST priorities! Taking these loans out at such ridiculous interest rates will certainly not help them “get by” in the future. Surely you see the cycle they are setting up for themselves?

Don’t be a moron. You can get by even with minimum wage jobs in this country. You think going to a pawn shop charging 1000% interest is going to solve the problem? What people really need is to be able to learn a trade or gather some skills so they won’t have to be in a minimum wage job to begin with.

Actually a frightening percentage of people who use these payday lenders are medical and dental professionals. And as for the poor and down on their luck people who need a break. The equation is spend less than you make. It doesn’t say how much you have to make. No matter how little you make, there is someone making less. I lived in an attic for $8 a week back in the late 70’s. Every other week on a Friday I bought a can of beer. Good times…

Just for the record, Anonymous, you started off with the wrong form of “You’re,” perhaps before assaulting someone else’s education you get your own ducks in a row.

As for the topic at hand, I am a pretty laissez-faire kind of guy. However, in this case, I think payday loan businesses should be outlawed. This is usury at its worst.
Couple that with my desire to force students to take a personal finance course before receiving a high school diploma, and we might be on our way to fixing the state of this country’s budget issues (both personal and government). In fact, if we force a finance course on everyone, we may not even need to waste the ink and paper on outlawing payday loan joints, you’d figure everyone would be smart enough to avoid them!

I’m a “newbie” to the Mr. Money Moustache blog, but already adhere to many of the principles he discusses. I was lucky enough to have a Mother that was very frugal (and CANADIAN)! Not into shopping and such, and though I’ve made plenty of mistakes I’ve never been into “keeping up with the Jones’s!” It’s very discouraging when I see my friends that have children trying to “buy” happiness! It’s a stressful lifestyle, and the mentality is passed on to the children! I agree with you 100%!!! Most people getting out of high school and college don’t have a basic grasp of credit card interest, car loans or mortgages! A simple finance course given to young people before they go out into the working world could save so much heartache! Money problems, statistically, are one of the main reasons for divorce! AND are often an issue with adults that commit suicide!

Outlawing payday lenders does not decrease the demand for payday lenders. It just means instead of going to an open and regulated establishment that pays its taxes and is subject to normal creditor rules, those in need of quick cash will go to the mafia or equivalent, at higher rates because of the illegality, and get their knees broken or killed if they don’t pay back. You can’t outlaw stupid.

Payday advances are fucking retarded, MMM, I have to agree. I’m a finance graduate who never was taught the lessons of money borrowing until I recently bought a home of my own, because frankly, I was always smart enough not to spend money I didn’t have (excepting of course a mortgage). But 3685%? That’s fucking ridiculous. I think your “business” would probably be better suited as a charity, as it is very hard to stay in a for-profit state where you treat your clientele as morons AND assault them. If you ever do open up shop in Maryland, however, I’d gladly work for you. Teaching myself about personal finance and growing my ‘stach has been a great sense of pride for me; I think working to educate others how to do the same would be the best sense of accomplishment I could have…

The absurd rates charged here remind me of those rent-a-car insurance rates. Oh look, only $7.50 a day, how can I not afford… wait, that’s $2700 a year for insurance! I rented a Mercedes on vacation once, just to try one of these fancy cars for once, and they wanted to charge me $50 for a day for insurance. That’s $18,250 a year. That was a deal-breaker for me, even though I was only getting it one day. He was anxious to rent that turkey that surely doesn’t get rented that often, so he said “Oh, we don’t consider it by the year.” Well I do. They came down to 30 bucks just to make the sale. Goes to show everything’s negotiable. Still not worth it, but it was fun once and I didn’t want to be on the hook for anything that broke.

I’m a graphic designer and when I see a logo with a letter replaced by something—I typically hate it—but to have it be Mister M$ney, and not Mi$ter Money (which would still make my physically ill)….. I guess you’d have to be mentally impaired to trust the company that gave that the green light.

ps. caught the blog yesterday and am reading it start to finish; being 25 and as fugal as they get (bike everywhere, never go out, the whole thing. my mustache is 7yrs long), I can’t wait to chow down on more delicious savings building knowledge. Oops, some got caught in my stache—I’ll save it for later :)

Ok, I’m another newcomer reading my way thru here start to finish, including all the comments. I literally laughed til I cried at this post, then followed the link to “ermine’s” and laughed just as hard. Better than ANY comedy club anywhere. OMG. My husband asked me what I wanted to do for my birthday coming up (we hate hate hate gifts: “here, I wrecked the planet for you.”) and I told him “spend the day in my bathrobe reading MrMoneyMustache all the way thru without stopping”.

I second Peter. We’ve got to start educating people to have a chance against what I call Pernicious Capitalism. If you would let me try to educate people first before punching them in the face, I would come work for you in a split second.

Same here- newcomer reading through… when I should be in bed! So far I’ve found this blog to be hilarious, educational, and inspiring. As a female, I never thought I’d be excited about growing my own mustache!
I also love the punching faces approach, even though I owe myself a few punches for some non-economical bulbs.

I read this hilarious article while sitting in the very crowded silent area of my school’s library. Why did I subject myself to just torture…? :D :D :D I have to agree payday lenders are one of the most predatory industries out there. It would be a great cause to try to permanently put them out of business. Maybe something like this – minus the actual facepunching, as the resulting legal liability might be a little much for a non-profit to handle – would be a viable idea. Perhaps a non-profit personal finance advice shop, empowered to make small donations (~$100) on condition that they show concrete improvements in personal finance.

I have to agree. I’m a finance graduate who never was taught the lessons of money borrowing until I recently bought a home of my own, because frankly, I was always smart enough not to spend money I didn’t have (excepting of course a mortgage). But 3685%? That’s fucking ridiculous. I think your “business” would probably be better suited as a charity, as it is very hard to stay in a for-profit state where you treat your clientele as morons AND assault them.

Actually this brings up an interesting idea, one that could be profitable, provide a much needed service (i.e. financial education), and could help a lot of people. Someone joked about setting up a non-profit punch in the face, but what if instead of literal you turned it into figurative. If you set up a non-profit and opened a financial advice service next door to these places you could run them out of business and do a lot of good in the community. Just sayin’.

Hi there
I’m a newbie reader from Scotland, I love this blog this article is so funny! I’m working my way through from the beginning but this is my favourite one so far!

Whilst I agree that people have to be pretty stupid to be dealing with these types of companies you must also have to be pretty desperate to use them….. overdrafts maxed out….credit cards at their limits and instead of dealing with the underlying problem, these loans are another way to burying their heads in the sand ……. My point being its delaying the inevitability that if you have debt problems they ain’t going away

But i have to say that if people had a choice between getting a punch in the face or calling their creditors I’m sure many people would take the punch in the face! Scary stuff!

I agree with you that these predatory lending places are a ripoff. How people can be so stupid to use them is beyond me. It makes me sick when I hear the Amscott commercial say something like, “always use cash advances responsibly” because it’s an oxymoron. And only a moron would use such a place to get ripped off and think he was doing him or herself a favor.

Lending a good personal example and words of wisdom may be more beneficial to these “stupid people” rather than being judgmental of them. I was once one of “these” people, and I’m not stupid- I just didn’t know any better. With knowledge came change. Not by being criticized.

Very well said Simona. “With knowledge came change. Not by being criticized.” I also learned the hard way getting into debt and then getting out of it. After college I foolishly got $10,000 into credit card debt, at a time when credit card interest rates were 18 & 20%. Fortunately for me my boyfriend’s mother offered for me to live in her house rent free for a year with the understanding that everything I made went to pay back the credit card debt. And she did it in such a gracious, kind and non-judgmental way. I never once was made to feel stupid but instead learned my lesson and gained an understanding of managing my personal finances. I will forever be grateful to her for her approach.

Laugh out loud funny there.
If you haven’t already set up shop (since I’m a couple years behind) let us know where to go for our “spanking”.
I feel like I need a punch in the face sometimes to get back on track.

I must say, I’m greatful for payday loans for one single reason. About 7 years ago, when I had no idea how to handle money ( no one had taught me that theres even such a thing as a budget!) I got into more debt than I could handle. But then came this amazing business that gave me the extra cash I needed for necessities like food and gas when I was desperately in need. Only, I soon came to realize this place was not quite as amazing as I first thought, and I got in such deep financial shit, by borrowing at such high interest and making my next paycheck cover that much less. It was the worst, most stressful time of my life. That experience, single-handedly drove me to search out information about how to handle my money and debt. It was a very expensive lesson to learn.

Punching people in the face won’t help the marginalized who are preyed upon by payday loan companies. (MMM writes for the complainy pants middle classes.) What does help are policies such as VanCity Credit Union (google Vancity and BC) created – check out their short term loans. Ask your local credit union to do the same.

http://www.theglobeandmail.com/report-on-business/payday-loans-predatory-loan-sharks-or-crucial-fix-in-a-pinch/article24463029/
Calgary’s tussle with the issue comes as the city is planning to implement a poverty-reduction initiative, which has identified a payday lending bylaw as one possible solution.
“They do target low-income people in low-income neighbourhoods. … They know who their target market is – people who can’t afford to pay the high fees and interest that payday lenders charge,” says Mike Brown, who works on public policy at Momentum, which runs community economic development programs in the city.
He says lower oil prices are adding urgency to the city’s efforts as “people get laid off – many Canadians don’t have an emergency fund, so they run into a problem of needing credit right away, and if they can’t get it from their banks, they’re more likely to go to a payday lender.”
Momentum has mapped 86 payday locations in Calgary and found 73 of them are located in areas with above-average incidences of poverty.

I just started reading your blog from the beginning and couldn’t help but notice that two posts back you mentioned “mr money” as a search term that led three folks to MMM. Perhaps you’ve already roped in a few of Mister M$oney’s potential clients.

My sister-in-law used to work at one of those payday loan places (I know, I know). She absolutely hated it. You’d see some of the most desperate people walk through the doors, ready to do whatever was necessary–usually to pay for medical expenses, unfortunately.

She did a somewhat Mustachian move here, though. She would tell the people to turn around and get out. She would explain the predatory nature of the loans, and tell these people to do anything but get a payday loan. This obviously didn’t work out into a career for her (thank god), but I hope that she helped just a few people avoid a devastating financial choice.

MMM is lucky he doesn’t watch a lot of daytime TV. It it is a treacherous marshland of adverts for high interest loans, internet gambling and really low value life insurance that will pay for a funeral or leave an unspecified cash gift for loved ones.
Another reason to ditch the TV

First off love your blog so far. Just started reading a few days ago and am powering through from start to finish… I clearly have a lot of reading to do…
This post resonated with me as I got my evening mail last night with a personal ad directed at me from one of the big name lending companies out there.

The advertising IMO is offensive and predatory to say the least especially for those who do not understand finance and are to lazy to look at the fine print.

I was offered a loan of $4000 no questions asked with easy payments of only $162/month for 42 months.
They made it sound like a screaming deal… That is 162*42 = a grand total of $6804 and an interest rate of approx 30%

WTF!!! (Although I never encourage this at all)…. my credit cards have a better APR with 10-15% rates and balances of 5-15K that would be a much better option than this!
They advertised that the benefit is that it would be easy to budget with set monthly payments… because avg American consumer apparently needs this kind of help…

Sorry a bit of a rant but it does baffle me on how many people are OK with this kind of lending.
I still do believe that basic finance class should be mandatory in high school as too many of our youth do not understand the basics and Credit cards and new car ads etc do not help this at all.

In any case look forward to the continued reading and I will plan to offer some of my own comments and insights over time.

I’d have to work on my right hook but I do have customer service experience. I worked for a bank but never made my sales goals – I was too busy explaining to customers how to avoid fees and how the debt products (mostly overdrafts) they already owned work!

“On the bright side, the commercial property adjacent to this one is still vacant. I’m thinking of opening up my first Mr. Money Mustache franchise right there, and having my sign list the same services. Except when you come in and actually ask for a loan, I PUNCH YOU IN THE FACE AND TELL YOU TO WISE THE FUCK UP AND GO SELL SOME OF YOUR SHIT INSTEAD OF BORROWING MORE MONEY!”

So am I correct that this actually happened? Ha!

I knew from recent posts that you bought a property, but I just saw your meet up tweet and it looks like you literally bought the property next to Mister Money. Does this mean that we can take all off handed comments on the blog as a sign of things to come? If so, I believe you mentioned founding some sort of utopian bike city a few years ago…

I went to one if those places once and only once, when my other half and I had just moved in together, we had no saleable possessions (our bed was 4th hand, and we had no blankets at all. It was winter and we were sleeping in jeans! We had a very used sofa, and 2 pans plus a (borrowed from a friend) fridge and 3 cooking utensils in our kitchen. We did have a thriving herb box, but we used to exchange our parsley and basil with a local Lebanese restaurant. We would supply herbs, they would give us dinner once a week.) We went to cash converters, for a loan for $300 for an unexpected medical bill of mine. We paid $400 for the privilege, paid the bill, and never went back. It got us through a desperately tough week, but I’d never set foot in there again. It was an unwise decision, but thankfully we had the nouse to ensure we would have the $400 spare before it was due. We had a friend who would get payday advance loans to pay off her payday advance loans. It made me slightly queasy to see her being taken advantage of but (back then) we had no money to loan her.
They should be banned

It is easy to call payday loans “predatory” and I’m sure that many people got burned using them, but they can be very helpful. Sure, it would always be better to have the money on hand, duh, but if your car needs to be repaired, and you don’t have the money on hand, paying the fee might be preferable to not having access to your car for 2 weeks and missing out on your paycheck altogether

Also, annualizing the costs is silly and misleading. That’s like saying “The annual cost of this 3-star hotel is 36 500 USD”

Payday loans are ultra short-term for people who don’t have access to more traditional lines of credit. Thomas Sowell, as usual, explains this very well in his columns.

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